This is a partial transcript from "The O'Reilly Factor," Mar. 24, 2005, that has been edited for clarity.

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BILL O'REILLY, HOST: In our "Personal Story" segment, right now there are at least five U.S. military deserters trying to get asylum in Canada. The first one, Jeremy Hinzman (search), was almost glorified by the Canadian media.

He deserted in January of last year when the Army told him he would be shipped out to Iraq. Hinzman claims he's a conscientious objector, and the military didn't buy that. So he split to Canada.

Well, today the Canadian government ruled Hinzman is not entitled to asylum, and he and his family have to go back to the USA after an appeals process, where he will most likely be facing military justice, as he should be.

Also up in Canada, there's a huge debate going on over terrorism after a known terrorist returns there to live in Montreal.

Joining us now from London, England, is Mark Hosenball, an investigative correspondent for Newsweek magazine who's following the Canadian situation. Here in the studio, Deroy Murdock, who wrote a column on Canada vis-a-vis terrorism last week, I believe it was.

Right? Last week?

DEROY MURDOCK, COLUMNIST: It was last week.

O'REILLY: Now, we said to the audience that this Hinzman was not going to get asylum up there, because all hell would have broke loose. Americans would not have breached that.

There's a difference between being a draft dodger, OK, and going up there and volunteering to serve in the armed forces and then saying, "You know, I don't think I want to go to Iraq."

So the Canadian government, I think, made the right practical decision. Do you think it's a pro-American decision?

MURDOCK: Well, remember, there was a summit between President Bush and Paul Martin (search) of Canada...

O'REILLY: Yesterday.

MURDOCK: ... just yesterday so it would have been a really rather embarrassing and difficult for them to rule this way in favor of this guy after that summit. I think on the grounds, though, he said that he would be willing to fight defensively but not offensively.

O'REILLY: He called the war illegal. That was his main thrust, Hinzman. He said to the Canadian government this war is illegal. And the Canadian government said, look, there's no basis for that.

MURDOCK: Yes. It's one thing to be a pacifist and stay out of it completely, but you can't put on a uniform and say I'll fight defensively for my country but not offensively. And trying to split that difference and then put in a situation where he just didn't qualify for asylum or refugee status.

O'REILLY: Mr. Hosenball, Americans are confused about Canada. The lenient immigration policies they have, obviously you're reporting, and to some extent Mr. Murdock and myself have indicated that, you know, they let people in there that are very dubious people, terrorist backgrounds, et cetera.

Is that based on their liberalism or an anti-American feeling, in your opinion?

MARK HOSENBALL, NEWSWEEK MAGAZINE: No, it's based on their liberalism. I mean, they've always had a liberal immigration policy because it's a vast country with not many people and need people to come in and work there.

O'REILLY: Yes, but the U.S. State Department made it clear, so has Ambassador Cellucci, that this is hurting Americans and it is a threat to America and don't do it.

HOSENBALL: Yes, but I mean they're continuing to do it. I mean, they let this guy Fateh Kamel back in, who was allegedly kind of a terrorist mastermind who helped to recruit Ahmed Ressam, the would-be 2000 millennium LAX bomber. They let this guy back into the country after he served four years in a French prison for terrorist-related offenses.

Now, he was a Canadian citizen. He married a Canadian woman. And they apparently have decided that they can't revoke his Canadian citizenship because there's no evidence he lied when he applied for citizenship. So they have to let that guy back into Canada.

Recently they let out of jail another guy who was one of Ressam's — the would-be Minnesota bomber — roommate, because the judge said he had, I guess, been in jail too long and wasn't a threat, even though the intelligence service kind of wanted to throw this guy out of the country.

So they have problems, you know, balancing civil liberties against threats, and also they have a reputation to some extent for having the intelligence service that is a little bit under-funded and doesn't have enough guys.

O'REILLY: And you don't see that as an anti-American, you know, situation, where you've got a guy that we luckily caught coming down from Vancouver to try to bomb LAX. And they let his roommate out. And now this terrible guy you mentioned that Deroy wrote about is let out of prison — four years in France. They should have kept him much longer than that. And he's now walking around Montreal.

You don't think that's an anti-American thrust? That doesn't sound like a friend to me.

HOSENBALL: I wouldn't say it's friendly. But whether it was deliberately an anti-American thrust, I don't know. I mean, they claim, and I have spoken to people in Canada about this. There's nothing they can do about it, because he's a Canadian citizen. So they had to let him back in.

I mean, you know, there could theoretically have been proceedings to revoke his citizenship, but then they'd have to keep him in Canada for long enough to do that.

O'REILLY: Yes, but they could probably keep him under house watch or something — well, maybe not with their laws. How do you see it?

HOSENBALL: Well, supposedly, I mean, what I was assured was they're keeping people like this under very close surveillance.

O'REILLY: Surveillance. Well, maybe they are. I don't know.

HOSENBALL: Maybe they are.

MURDOCK: They're putting themselves in tremendous jeopardy. I mean, this guy Fateh Kamel, who was thrown in jail for France for just under four years plotting to blow up the Paris metro, I mean, this is a tough guy. He could try to do the same thing in Montreal or Toronto.

They busted up plots to blow up a Jewish neighborhood in Montreal, to blow up an El Al jet flying over Canada. So they're not only putting the United States at tremendous risk. This guy Kamel and others up there who come across the border hurt us and try to kill us. But they could put themselves in jeopardy up there as well.

O'REILLY: Do you think they're doing it because they just don't care about the war on terror?

HOSENBALL: No. They're doing it because...

O'REILLY: Wait a minute, Mark. Let Deroy say.

MURDOCK: I think they perhaps didn't feel struck as hard as we were on 9/11. They lost 24 people. We lost just under 3,000.

I think until a couple of years ago they didn't even have an anti- terrorism law, so it's perfectly legal to raise money for terrorists until a couple of years ago. They're coming into this fight late.

O'REILLY: OK. What do you think, Mark?

HOSENBALL: Well, I think they are coming to the fight late. I think they're probably still inadequately funded in terms of their ability to monitor and shut down terrorist groups. They have tightened their laws a little bit.

On the other hand, they clearly, at least for their own domestic population, the politicians up there clearly want to distinguish themselves from the United States. And, you know, so if a politician was involved in letting this guy back into Canada, and I don't see there is specific evidence of that, then, you know, there's probably an element of not wanting to be seen to be the United States' poodle. And that is anti-Americanism.

O'REILLY: Yes. Listen, I think Canada basically now is thumbing its nose at the USA, the Canadian government. But I am heartened by the ruling today about Hinzman.

And I think that they figured out up there, Mr. Murdock, that if they allow this Hinzman deserter guy, because he's been, you know, The Toronto Globe and Mail and the CBC love this guy. They love him. OK?

If the government said, "Yes, we love him too. Give us your deserters. Come on in here," there would have been a big international incident. I'll give you the last word, Deroy.

MURDOCK: I think that could have blown up in their faces. But I think another thing that fuels a lot of this is just political correctness based on getting votes out.

Paul Martin, the current prime minister, when he was finance minister, attended a dinner back in, I think it was May of 2000 that was sponsored by a front group for the Tamil Tigers. That's a Sri Lanka terrorist group that killed about 60 people including two Americans. The reason is the Tamils are a big minority, and they like their votes.

O'REILLY: Yes. OK. We're glad Hinzman is coming back to face justice here, although he will appeal and appeal and appeal. But he'll be back. Gentlemen, thanks very much. We appreciate it.

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